The Global eBook Report: Current Conditions & Future Projections. Update October 2013

unveiling its Amazon Associates program. (Shelf Awareness, 14 June 2013 and 9 July 2013 )
    In addition, Amazon reportedly has started preparation for entering the Russian market with a dedicated website, after hiring Arkady Vitruk, formerly the general director of one of Russia’s leading publishing houses, Azbuka –Atticus. ( Russian Book Industry Magazine , 4 July 2013)
    Amazon’s own publishing arm had started its international expansion already in late 2012 to Germany and Europe. (Amazon-Verlage nehmen Kurs auf Deutschland, buchreport November 29, 2012 ) In France, it launched an imprint, Jet City, specializing in graphic novels. ( Livres Hebdo , 10 July 2013)
    Interestingly, all Amazon figures breaking down international sales reported by Amazon hint at a significant slowdown in its growth for 2012. Growth in overall international media sales dropped from 23 percent year on year for 2011 to 9 percent in 2012. The by-country rates fell on average by more than a third, for Germany, Japan, and the UK. For the rest of the world, the expansion slowed down from a mesmerizing 69 percent in 2011, to a still strong 50 percent in 2012. In the second quarter of 2013 though, international sales have grown by just 13% (after beeing up by 15.9% in the first quarter of 2013).
    With no details indicated in the filings of the company, and with no global economic factors providing a plausible explanation for the pattern, it must be assumed that competition is the most reasonable explanation. With more and more hounds chasing the global leader of the segment, on both local as well as global grounds, with Apple, Google, and Kobo, as well as scores of homegrown competitors stepping into the arena, Amazon should probably get ready to meet a bunch of serious challengers in the months and years ahead.
    Table 10-1. Amazon’s performance in 2012
    2012

2011

2010
Source: SEC filings . *€2.6 billion. Estimate buchreport .
Absolute ($bn)
Growth yr-on-yr
Media ($bn)
Growth Media
Absolute ($bn)
Growth yr-on-yr
Media ($bn)
Growth Media
Absolute ($bn)
Growth yr-on-yr
Media ($bn)
Growth Media
North America
$34.8
30%
$9.2
15%
$26.7
43%
$8
16%
$18.7
46%
$6.9
15%
International
$26.3
23%
$10.7
9%
$21.4
38%
$9.8
23%
$15.5
33%
$8
18%
Consolidated
$61.1
27%
$19.9
12%
$48.1
41%
$17.8
19%
$34.2
40%
$14.9
17%
DE
$8.7
21%
$3.4*

$7.2
36%

$5.3
JP
$7.8
18%

$6.6
32%

$5
UK
$6.5
20%

$5.4
38%

$3.9
DE+JP+UK
$23
20%

$19.2
35%

$14.2
Rest Int
$3.3
50%

$2.2
69%

$1.3
    Amazon in the crossfire of international controversies on its tax paying
    Founded as an online bookseller in 1995 in Seattle, Washington, Amazon.com, Inc. (NASDAQ: AMZN) portrays itself not as a specialist in books, but as “Earth’s most customer-centric company,” catering to “four primary customer sets: consumers, sellers, enterprises, and content creators.” Even in the short version, the company statement hints at the ambition of Amazon to assume, as a vertically integrated service provider, a broad number of business roles that traditionally had been the domain of a wide array of separate businesses, notably bookseller/retailer, used bookstore, library, publisher, service provider to authors, as well as publisher (including print on demand), ecommerce platform, and marketplace — to name just a few.
    The integration of many roles under one roof has, on one hand, opened unique ways of expanding Amazon’s business but has on the other hand drawn critical reactions from many of the traditional players of the book business and resulted in recent controversies.
    In 2012, Amazon found itself center stage in a number of controversial debates, notably in Europe. Portraying itself as a global, “pan-European” company , the firm was critisized in Great Briain and subsequently in France for minimizing their tax payments in countries of operation. (For the global debate, see ). Aside from such general critisicm of its business practises, a specific issue with the taxation of ebooks has also provoked controversy across Europe. In the majority of countries of the European Union, printed books benefit from a reduced VAT, while ebooks tend to be subject to the full tax (which makes a difference between zero for print, and 20 percent in the UK, for instance, or 7 percent versus 19 percent in Germany). In fact, Amazon charges its British customers a VAT of the full 20 percent. Yet by having set up European headquarters in Luxembourg, which collects a VAT of only 3 percent for an ebook,